New Delhi, Feb 20: Investors have swooped down on the Ind Jyothi counter at the Bombay Stock Exchange to make a killing. Units of the income and cumulative options have shot into the limelight with a jump in both price and volume. The plan B units are currently trading at Rs 25 and with redemption at Rs 31.20, it translates into a neat gain of Rs 6.2 or approximately 25 per cent in a little over one month!Since the asset management company (AMC) had assured that income payout would be the same for both the plans, the higher payout in Plan A would also be applicable to Plan B. Thus, the payout in cumulative option works out to Rs 31.20.
Indbank Mutual Fund has decided on March 2 as the record date for the redemption of Ind Jyothi units. The units are to be redeemed on March 31, 1998. Trading in units will be suspended from March 2 and hence, frenzied activity is expected at the counter in the days to come. The first signs of largescale buying were evident on February 18 when 10,100 units were tradedagainst an average volume of 1,000 units. The price also shot up from Rs 21.85 to Rs 23.05. On February 20, 16,300 units were traded with the price catapulting from Rs 23.90 to Rs 25. Thus, the price has moved up by a little over 16 per cent in just seven trading days. The market price is currently quoting at a premium of 11.5 per cent to the net asset value (NAV) of Rs 22.41.
On the other hand, trading in Plan A units, which was hitherto subdued, picked up on Friday with the price jumping from Rs 8.70 (February 11) to Rs 10. In fact, units of the income option were traded after a gap of 9 days. Volumes were however moderate with 2,500 units changing hands.
Interestingly, had the units been bought at Rs 8.70, returns in Plan A would have been a mouth watering 49 per cent, inclusive of a dividend of Rs 2.99 (14.75 and 15.25 per cent on Rs 10) and redemption at Rs 10 (gap of Rs 1.30). Now, at Rs 10, one would get only dividend of Rs 2.99 on Rs 10 or a return of 29.9 per cent. With Ind Jyothi cumulative andincome plans to be redeemed at Rs 10 and Rs 31.20, respectively, the shortfall is likely to be around Rs 56 crore, based on the current NAV. While Plan A has a unit capital of Rs 47 crore, Plan B's capital is Rs 46 crore.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
